Wind energy manufacturing boom taking shape in the U.S.
Local sourcing could be a boom for suppliers in host of industries
Dave Hannon -- Purchasing, 7/21/2009 5:08:34 PM
This news that Nordex USA, the U.S. subsidiary of a German wind turbine manufacturer, is breaking ground this week on a manufacturing plant in Jonesboro, Ark. was only the latest in a growing list of signs that the wind energy manufacturing market is setting up shop in the U.S.
Nordex says assembly at the Arkansas plant will begin in the second half of 2010, operating at full scale by 2012 with an annual production capacity of 300 turbines, or 750 megawatts. The entire facility, including rotor blade production, will be fully operational by 2014.
The U.S. Energy Department released a report last week saying "Soaring demand for wind has spurred expansion of wind turbine manufacturing in the U.S. As a result of this continued expansion, the American Wind Energy Association estimates that the share of domestically manufactured wind turbine components has grown from less than 30% in 2005 to roughly 50% in 2008, and that roughly 8,400 new domestic manufacturing jobs were added in the wind sector in 2008 alone."
And, according to most experts, the wind energy manufacturing industry is a good one for supply chain because wind turbine manufacturing and assembly relies heavily on locally sourced parts than many current manufacturing industries. According to a Reuters report, "Local sourcing makes sense for wind turbine production, because of the high number of components needed to manufacture them. The main components are bulky, so transportation can add a huge chunk to the cost of installing wind power. Local sourcing of production cuts into that cost."
Jeff Anthony, director of business development at the American Wind Energy Association, agrees. In an interview, Anthony tells Purchasing.com, "As compared to say, the electronics industry, the size and weight of the components involved in this industry are very significant and the transportation cost is much higher. So when international players are considering locating a factory in the U.S., one of the major considerations is the proximity to a suitable supply base."
OEMs also want to be near their end-market as well, he says, which is a good thing for suppliers in the 28 states that have passed laws requiring utilities to have a certain percentage come from renewable energy.
Anthony says there really isn't a standard supply chain model in the wind energy industry today. While one OEM tends to make more of the individual components, others tend to outsource more and focus more on certain components and assembly.
"It still presents a variety of opportunities for suppliers in the U.S. to work with all of the OEMs building up their infrastructure in this country," Anthony says. "Of the top 10 wind turbine manufacturers globally, only two are based in the U.S."
According to the AWEA, there are more than 8,000 components that make up a finished wind turbine in the tower, rotors, nacelle, foundation and other sections.
And with demand for wind turbines up, the manufacturing process is getting a much closer look lately. Atlantic Wind & Solar claims to be designing what could be known as the world's first automated fabrication process for the manufacturing of wind turbines.
Atlantic Wind & Solar says it hopes to replicate an automotive assembly line type of system, which theoretically will be capable of manufacturing up to one complete (1.5 Mw) wind turbine per hour, based upon an eight hour, daily work shift, or an estimated 2,080 windmills per year.
"In light of the recent slump in the North American automotive sector, and against a background of soaring demand for key renewable energy components, AWSL has identified an extraordinary opportunity to utilize existing, underused, transferable resources from one sector, the automotive industry, to another, i.e. the manufacture of wind power turbines and other renewable energy components," company officials said in a statement this week.
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